Posts Tagged ‘Mortgage’

Common Down Payment Errors Real Estate Investors Commit

May 13, 2008

If you are planning to invest in a real estate property, making a payment up front is one of the most important and most critical steps in the mortgage procedure. The amount that you pay as down payment is a key determining factor on the amount of monthly payments that you will make which makes the decision of what amount to pay up-front affect you for the remaining period for which you will be paying off the balance of the entire amount of the investment property.

In order to avoid the complications that may arise in the future because of committing these down payment errors, here are some guidelines that will help an investor avoid making these errors themselves.

Making A Very Small Down Payment

Mortgages with very low down payments offered by many lenders nowadays may be attractive to a lot of investors. However, even if these lenders require less than 20% of the property’s selling price, the loans also require the investor to pay a private mortgage insurance which is an extra fee apart from the monthly payment that you will be paying for the balance. The purpose of this private mortgage insurance is to protect the lender in case you default payment on the loan.

Low or no down payment loans also carry higher rates of interest which can only result to more costs in the long run. On the other hand, a higher down payment will earn you a better interest rate if you have a less than stellar credit standing.

Making A Very Large Down Payment

The notion that the greater amount you pay for your down payment, the better off you will be is not always applicable when dealing with real estate investing. Sometimes, real estate investors, especially first time buyers, use a big portion of their savings in order to pay the down payment at their advantage only to find out in the end that they lack enough money to cover closing expenses related to their new home.

Not Making A Down Payment

Not making any down payment can be a very risky decision. If you do not pay a down payment for the property that you are planning to buy, it will put you in a position of having no equity of the property which means you do not own any part of it. Once the value of the property falls, you will end up owing more to your lender than what the house is worth. This would also make it more difficult for you to refinance your mortgage in the near future.

Incorrect Assessment Of Your Debt Comfort Level

Nobody knows better than you how much debt you can hold. If you think paying more at the start will give you more benefits, then do not let anybody talk you out on doing so. Just remember that the worst thing you can do is to lock yourself into a mortgage that will only cost you more each month that the amount that you are comfortable to spend.


Acquiring A Fort Lauderdale Real Estate Through A Mortgage Loan

May 7, 2008

Fort Lauderdale in Broward County is a prime location for many tourists around the world. Whether for business or leisure, that city is quite famous for being the Venice of America due to its intricate canal system. From scenic sights to exotic nightlife, Fort Lauderdale is truly a place of rest and relaxation for anyone who visits.

Real Estate Market In The City Is Shaky

Due to the rising number of foreign visitors, the city experienced an economic boom in the real estate market. During 1980’s, the city was flocked by many individuals from all over the world to grab real estate properties left and right – either used as a business investment or a place to settle down.

But this is not the case in the current situation of the real estate market in Fort Lauderdale. The market boom of residential properties dropped, as the number of foreclosures continues to rise at an alarming pace. Not only that, the high interest rates, as well as the devaluation of U.S. currency made these residential commodities almost impossible to acquire.

Despite the mortgage crisis, many are still eyeing real estate of Fort Lauderdale with interest, and are planning to go for a mortgage loan to get one. This is quite true despite the high interest rates for any mortgage type. So how is this possible?

Mortgage Loan during Mortgage Crisis

For starters, the high number of foreclosure should be your clue in getting a mortgage loan. You have to scout around the city and look for a financial lender that can give you the funds you need to acquire a Fort Lauderdale real estate for your very own. Get the ones that suit your budget perfectly, so that you won’t end up being one of those who were subject to foreclosure.

You might also check those lenders outside the city if the rates offered in Fort Lauderdale are not to your liking.

Next, you need to ready all the requirements for a mortgage loan. Check your credit score if it’s high enough to be eligible for one. If you aren’t, then you better start planning on repairing your credit status before you start thinking about getting a loan.

The mortgage crisis forced many financial lenders to implement stricter measures in releasing funds to their clients. You have to be ready to prepare all the necessary requirements such as credit scores, financial documents, personal identification, and other legal documents.

The best advice for this matter is to visit different real estate companies and inquire about current status of Fort Lauderdale real estate. Since these firms are associated with many financial lenders in and out of the city, they can easily provide all the information you need to get your mortgage loan started, and your goal for a home a possibility.

Vanessa Arellano Doctor

Florida Real Estate: Surviving The Mortgage Bust

May 3, 2008

The mortgage bust that hit the U.S. resulted in a major decline in the real estate market.

Florida and Miami were among those who were hit the hardest in the market decline of residential and commercial properties. Though compared to the state of the real estate market in 2006 and 2007, many analysts predicted that recovery is possible this year.

Mass Foreclosure Hit Florida

Due to the devaluation of the currency, as well as the high interest rates of many financial lenders, there has been a mass foreclosure going on in Florida. As the number of investors failed to pay their obligations, banks and other financial institutions were practically foreclosing properties left and right. These foreclosed residential units added to the rising number of unsold homes, which further depressed the current real estate market.

Failed Condo Projects Converted To Rental

Overbuilding of condominium units during the early market boom contributed to the decline of real estate market in Florida. At the moment, there’s a large supply of vacant condo units which was never acquired by any of the locals, and is converted into rentals to make ends meet.

But before that, the lack of market and acquisition of these condo units affected the rental income growth of Florida, which in turn made a negative impact on the overall percentage of the real estate economy.

Despite these problems, however, late months of 2007 ended in a positive result in the market. Since the conversion of these condos into rental residential units, the market seems to have stabilized and is projected to improve in the coming months.

Apartment Rental Booms

The downfall of condo acquisition sparked the current market boom for apartment units. According to the figures of REIS, there’s an approximate of more than 230,000 residential units available in the market since 2007, with an average monthly rent of $1,062 per unit.

Also, the increasing demands of new workforce in the state produced a higher demand of residential units in South Florida. Construction projects for apartments can be seen all around the area to address it. Analysts are now reporting that development for such real estate will continue to be seen in the next 24 months.

Foreign Acquisitions On Residential Properties

There has been an increasing number on acquisition of real estates, especially condos, from foreign investors. According to statistics, it seems that Canadians and Europeans are taking advantage of the currency devaluation by purchasing condo units in the city at a cheaper price. Since they are not affected with the mortgage crisis that is prevalent in the nation, the investments they put it are likely to be affordable on their end, in contrast to local investors.

Vanessa Arellano Doctor